Amazon raises minimum wage to $15 for all U.S. workers

Last Updated Oct 2, 2018 12:14 PM EDT

Amazon said it will increase its minimum wage to $15 an hour for all U.S. workers. The increase will include both part-time and temporary holiday employees. 

The higher minimum wage, which will go into effect on Nov. 1, comes after the company faced criticism over its pay and treatment of employees. Sen. Bernie Sanders, I.-Vermont, had targeted the online retail giant for paying wages that he said left its employees relying on public assistance for food and shelter, even as Amazon CEO Jeff Bezos now stands as the world's richest man. 

Amazon said the $15 minimum wage will apply to more than 250,000 employees and 100,000 seasonal holiday employees, including workers at Whole Foods. Workers hired by temp agencies will also receive the $15-per-hour wage. The typical entry-level wage for warehouse workers is about $11 an hour, although it varies by location. The company also said it would push to raise the federal minimum wage of $7.25 an hour. 

"We listened to our critics, thought hard about what we wanted to do and decided we want to lead," Bezos said in a statement. "We're excited about this change, and encourage our competitors and other large employers to join us."

The decision should be a "shot heard around the world," challenging other businesses and lawmakers to boost baseline wages, said Sanders at a press conference after Amazon's announcement. 

"There's no reason why other profitable corporations like Walmart, like the fast food industry, like retail in general and other employers should not also be paying their employees at least $15 an hour," Sanders said. "The standard should be if you work 40 hours a week, you should not be living in poverty. I hope very much other corporate leaders will follow his example."

Labor leaders and activists pushing for a $15-an-hour minimum wage claimed the decision as a victory for their campaign, while financial analysts called the decision was politically savvy given the pressure on Amazon from lawmakers like Sanders and growing consumer concern about how the company treats its massive workforce.

"The narrative that Amazon is an ungenerous employer at a time when the company's sales, profits, and valuation are soaring does not play well among many customer segments," noted Neil Saunders, managing director of GlobalData Retail, in a research note. 

But Saunders pointed out Amazon is also facing a competitive threat: the tight labor market means it's increasingly fighting to hire and retain workers.

"Amazon's superior growth necessitates a lot of recruitment which is becoming increasingly difficult in a tight labor market," he noted. "This is especially so over the holiday season. Without a rise in wages, Amazon would be placing itself at a disadvantage in the labor market."

The median U.S. salary for full-time, seasonal and part-time Amazon employees is $34,123, according to an Amazon spokeswoman. Amazon has a total of more than 575,000 employees around the world. 

Amazon said it wants to convince lawmakers to boost the federal minimum wage. 

"The current rate of $7.25 was set nearly a decade ago," said Jay Carney, senior vice president of Amazon Global Corporate Affairs, in the statement. "We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country."

-- The Associated Press contributed to this report.